The retail sector is a key driver of the U.S. economy, with nearly 4 million establishments providing 29 million jobs and generating more than $1 trillion in gross domestic product (GDP) for our economy. Retailers are also the backbone of local communities; more than 98 percent of businesses have fewer than 50 employees. 

Whether you have a single shop or three locations, or sell flowers or electronics: running your business comes with risk. From cybercrime and product recalls to customer injuries and theft, just one of these incidents could force you to close your doors if you don’t have the right insurance coverage. With this in mind, choose your retail insurance coverage carefully — and then do everything you can to mitigate risk. 

Reduce Your Exposure

The first step in protecting your retail business begins with understanding potential risks. Employee injuries, property damage, robbery, and shoplifting are just a few hazards your store could face. There are actions you can take to keep employees and customers safe and reduce the risk of losses.

  • Practice good housekeeping: Do stairs, narrow passages, or uneven floors put customers, employees, or vendors in harm’s way? Install adequate lighting and keep floors clean and clear of clutter.
  • Establish a security plan: Install and monitor in-store security cameras, and make sure locks and alarms work properly. Inventory merchandise and audit money in registers on a regular basis. Limit access to cash and financial records.
  • Implement safety practices: Do employees know how to manage crowds or safely stock inventory shelves? Train workers on how to address difficult situations with customers and other visitors, how to use equipment, and how to handle boxes and other materials.
  • Protect your online presence: You rely on your computer to track inventory and sales, manage payroll, collect customer information, and more. Keeping your security software up to date and limiting access to sensitive information can help mitigate the risk of cybercrime.

If you’re not sure where to start, many insurers also provide risk control services to help you protect your retail business.

Choose Coverage Depending on Your Needs

A business owner’s policy (BOP), which combines general liability and property coverage, is a great place to start. A BOP will cover property such as your location, merchandise, and office equipment. You’ll also be protected from liability in the event a customer or other third party files a lawsuit against your business or your employees. There are other coverages you may need to safeguard your business. Some may be included in a BOP, but others may cost extra. Ask your independent agent about the coverage below to make sure you are protected.

  • Business income: Helps replace lost income if a fire, storm, or other covered event damages your location or inventory and you are unable to operate.
  • Brand and labels: Covers the cost to remove your label from damaged goods that are sold as salvage.
  • Product recall: Covers costs to notify affected parties; ship, store, or dispose of defective merchandise; and pay for overtime or added personnel to manage the recall.
  • Cyber: Covers costs to alert affected individuals, manage public relations, and defend you in a lawsuit if sensitive information, such as credit card or Social Security numbers, is lost or stolen.
  • Employee dishonesty: Protects you against financial loss resulting from employees’ dishonest acts.
  • Umbrella: Provides additional protection over your commercial auto and general liability coverages and can help safeguard your business in the event of a large claim or lawsuit.
  • Workers compensation: Helps cover an injured worker’s lost wages and medical costs and provides return-to-work support.

Policies vary both in items covered and limits to coverage, so it’s important to make sure that whatever policies and add-ons you purchase, all crucial areas are covered.

Ready for Business

Businesses fail every year, and this happens for a variety of reasons: poor pricing strategy, insufficient market need, lack of capital, or lack of coverage in the face of an outage or accident. Some of these reasons are complicated — but insurance doesn’t have to be. A conversation with your independent insurance agent or provider will reveal the appropriate coverage for your retail business, making sure you’re not just ready for sales and crowds — you’re ready for anything that comes your way. Reach out to an independent insurance agent, or check out Liberty Mutual’s retail business offerings.

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